Piestro calls itself an “automated pizzeria” that makes tasty artisanal pizzas within only three minutes. This involves the use of sophisticated robotics, and control systems.
The company is also raising capital through the crowdfunding platform, StartEngine. So far, Piestro has gotten commitments for over $161,000 from 180 investors. The valuation is $6.02 million.
The founder of the company is Massimo Noja De Marco, who is a veteran of the hospitality industry. Before starting Piestro, he was one of the founders of Kitchen United which has since gone on to raise $50 million (the most recent valuation was $140 million).
Keep in mind that De Marco is from a family with seven generations of Italian chefs. He also has worked with renowned restaurateurs like Wolfgang Puck.
Oh, and De Marco has had success in the technology market. Consider that he joined the board of Miso Robotics, which is the developer of Flippy (this is a robot cooking system for restaurants). I recently wrote about this company for InvestorPlace.com.
How Piestro Works
Even before the impact of the novel coronavirus, the traditional restaurant industry was under much pressure. Just some of the factors include rising costs for labor, rent and commodities, that have squeezed margins (they range from 5% to 10% or so). But restaurants also have challenges with maintaining loyal customer bases.
But with Piestro, the idea is to rethink the economics of the business. Consider that the unit is only 32 square feet, requires one to two part-time employees, takes about two weeks to launch and needs $50,000 in startup capital.
The underlying technology involves a sophisticated temperature isolation system that maintains the right temperature for the toppings and dough. The unit also has its own recipes – which use local ingredients – but can be uploaded with new recipes.
So yes, in light of the new normal of the coronavirus, Piestro may be an attractive alternative for entrepreneurs.
“As we transition into reopening, restaurants need to find a way to rebuild and navigate this new environment and provide fast access, great quality, the right price point and be even closer to consumers,” said De Marco. “Piestro is a real and viable solution for them.”
As should be no surprise, pizza is the most popular food in the U.S., which accounts for about 30% of the $154.8 billion global market. Estimates are that the spending will hit $233.3 billion by 2023. Pizza chains in the U.S. represent about 60% of the market.
But as for vending machines? What is the current market? Well, it is minuscule.
In other words, Piestro has the opportunity to be on the ground floor of a potential megatrend.
According to InvestorPlace.com’s Luke Lango: “Inevitably, I think the pizza vending machine market in the U.S. will go from essentially zero dollars today, to $4 billion or more in sales by the end of the decade.”
His forecast is based on the assumption that there will be more than 40,000 vending machines (this compares to 80,000 pizzerias in the U.S. today) and that the average revenues will be about $100,000 per unit. “Piestro is a potentially multibillion-dollar pizza tech company in the making,” writes Lango.
Bottom Line on Piestro
The goal for the crowdfunding campaign is to raise $2 million over the next three months. And the minimum investment is only $249.39. “With equity crowdfunding, we open up the opportunity to anyone — small investor to large funding ventures — to invest in the future of the restaurant industry and a truly unique concept,” said De Marco.
Now while the company is targeting a massive market opportunity, there are still considerable risks. The pizza category is highly competitive, with forward-thinking operators like Domino’s Pizza (NYSE:DPZ). There are also the high capital costs for building units.
Thus, before making an investment, it’s important to do your own due diligence and research.
Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.